KPN sells portion of German mobile phone towers for EUR393m

15 Nov 2012

Dutch telecoms company Royal KPN has entered into an agreement with American Tower Corporation for the sale of some of its mobile phone towers in Germany for a cash consideration of EUR393 million (USD500.2 million), resulting in an expected book gain of around EUR100 million. KPN said it will use the cash proceeds of the transaction to invest in the accelerated rollout of its E-Plus mobile network in Germany and to improve its net debt position. As part of the transaction, which is subject to clearance by the German Federal Ministry of Economics and Technology, E-Plus and American Tower Corporation have entered into a long-term master lease agreement under which E-Plus leases back space on the mobile towers which it requires for its own network equipment. Commenting on the agreement, Eric Hageman, CFO of KPN, said: ‘We are very pleased with this transaction. It is in accordance with our strategy, as we do not consider the ownership and development of mobile towers to be a core part of our operations. It is also at an attractive valuation. This transaction in Germany follows the sales of a large part of our mobile towers in the Netherlands between 2008 and 2012. American Tower Corporation has a strong operational track record and we look forward to a successful partnership which will support E-Plus’ network stability and business prospects.’

As previously reported by CommsUpdate, KPN Telecom earlier this year hired UBS for a sale of thousands of its German unit’s base stations. The move follows the collapse of talks between Spanish group Telefonica and KPN over a possible merger of their respective German units; at the time, KPN was fending off an unsolicited offer by Mexico-based America Movil (AM). However, in June 2012 KPN announced it had failed to find a buyer for E-Plus, citing ‘adverse conditions in financial markets’ as the reason behind the collapse of talks, and shortly after AM succeeded in its bid to increase its stake in the Dutch telco to 28%.

Germany, E-Plus Group, KPN